Nigeria’s Low Revenue Sustains Debt Pressure Despite Tinubu Reforms

Nigeria’s Low Revenue Sustains Debt Pressure Despite Tinubu Reforms Rising debt servicing costs continue to limit infrastructure investment even as fiscal reforms deliver modest improvements Nigeria’s persistent revenue challenges are sustaining pressure on public finances, with rising debt servicing obligations constraining infrastructure funding despite ongoing economic reforms under President Bola Ahmed Tinubu. Fresh concerns have emerged following data showing Nigeria’s total public debt climbed to ₦159.28 trillion as of December 2025, highlighting the growing strain on government finances and fiscal sustainability. The increase reflects continued reliance on borrowing to finance budget deficits amid weak revenue generation. According to figures released by the Debt Management Office (DMO), the country’s debt stock rose from ₦153.29 trillion in September 2025, representing a quarterly increase of ₦5.98 trillion and a year-on-year rise exceeding ₦14 trillion. Domestic borrowing remains the dominant component, accounting for more than half of Nigeria’s total debt portfolio.

Analysts warn that although recent reforms including fuel subsidy removal, exchange-rate adjustments and fiscal tightening have helped stabilise macroeconomic indicators, government revenues remain too low relative to expenditure needs. High debt servicing costs continue to absorb a substantial share of federal revenue, leaving limited fiscal space for capital projects such as roads, power infrastructure, healthcare and education investments. Economic observers note that this imbalance threatens long-term development goals despite signs of improved policy coordination.

Finance authorities argue that reform measures are gradually strengthening economic fundamentals and investor confidence. Officials maintain that ongoing policies are designed to enhance resilience, attract private investment and support sustainable growth over time. However, economists caution that without stronger revenue mobilisation, diversification away from oil dependence and improved tax efficiency, Nigeria risks deepening its debt burden while infrastructure deficits persist.

The situation underscores a broader policy dilemma facing the government: balancing urgent development spending with fiscal discipline in an environment of global economic uncertainty and domestic revenue constraints